The Poseidon Principles, a framework for assessing the climate impact of shipping portfolios, has shown that financial institutions are increasingly aligning their investments with the IMO’s ambitious decarbonization goals. The latest report highlights the progress made by these institutions in reducing the carbon footprint of their shipping portfolios, reports Poseidon Principles.
Key Findings
This year’s report, which also marks the fifth anniversary of the Poseidon Principles, highlights the transformative progress achieved since its launch in 2019 when it became the world’s first sector-specific framework for measuring and reporting climate alignment in shipping finance. What began as a conversation in 2017 and was introduced as a concept under development at the first Global Maritime Forum Annual Summit in Hong Kong in 2018 has since evolved into a celebrated model for industry-specific, transparent climate disclosure in shipping—one that has inspired similar initiatives in sectors like steel, aluminum, and aviation.
Key findings from the 2024 Annual Disclosure Report include:
- An average of 93.3% of signatories’ portfolio activity was reported, with all signatories reporting ship emissions data from at least 70% of their portfolio, 28 signatories achieving a reporting rate of 90% or above, and eight achieving 100%;
- The average climate alignment scores showed a noticeable progression from last year, with portfolios’ alignment to the IMO’s “minimum” and “striving” decarbonization trajectories improving;
- And collaboration and engagement are increasing between financial institutions and their shipping clients, demonstrating the initiative’s pivotal role in guiding the industry toward achieving net zero emissions by 2050 in line with the 2023 IMO Greenhouse Gas Strategy.
“The Poseidon Principles have redefined what is possible in transparent climate reporting for the shipping industry,” said Michael Parker, Poseidon Principles Chair and Chairman of Global Shipping & Logistics, Citi. “As we celebrate the fifth anniversary of this initiative, we recognize both the progress made and the opportunities ahead – this milestone shows how far we have come in five years, but also serves as a reminder that we are now five years closer to critical decarbonization targets for 2030, 2040, and 2050. We must accelerate efforts, addressing key areas of misalignment and ensuring collective ambition turns into transformative action.”
Lifecycle Emissions
In 2023 the Poseidon Principles adopted well-to-wake emissions reporting, encompassing full lifecycle emissions of fuels and setting a new benchmark for climate reporting in line with the latest climate science and supporting the IMO’s latest ambition.
In just five years, the Poseidon Principles have set the global standard for climate transparency in ship finance and inspired other financial disclosure initiatives like the Sustainable STEEL Principles for steel financing, the Sustainable Aluminium Finance Framework for aluminium financing, and the Pegasus Guidelines for aviation financing.
Climate disclosure reporting plays a crucial role in enhancing the transparency and accountability of climate and environmental impact, risk management, and strategic planning of participating organisations and their clients.
As the Poseidon Principles enter their sixth year, the Association celebrates the transformative power of collective action, and the tangible progress made toward decarbonising global shipping. While challenges remain, the shared commitment of signatories, shipping clients, and stakeholders is a testament to what can be achieved through collaboration and transparency.
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Source: Poseidon Principles
